Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 1 of 20 Michael Fuller, OSB No. 09357 OlsenDaines US Bancorp Tower 111 SW 5th Ave., Suite 3150 Portland, Oregon 97204 michael@underdoglawyer.com Direct 503-743-7000 Kelly D. Jones, OSB No. 074217 The Law Office of Kelly Jones Mark Geragos, Pro Hac Pending Ben Meiselas, Pro Hac Pending Lori Feldman, Pro Hac Pending Geragos & Geragos Of Attorneys for Ms. Spencer UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION MARIEL SPENCER, individually and on behalf of other customers, v. Plaintiff, INTERNATIONAL DAIRY QUEEN, INC., Defendant. Case No. 3:18-cv-1252 CLASS ACTION ALLEGATION COMPLAINT Unlawful Trade Practices Unjust Enrichment Demand for Jury Trial CLASS ACTION COMPLAINT Page 1 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 2 of 20 1. INTRODUCTION Mariel Spencer files this national class action on behalf of thousands of other Dairy Queen mobile app customers who were lured into a Dairy Queen based solely on the false promise of a free, delicious Blizzard ice cream treat. Under the law, Ms. Spencer and other mobile app customers ripped off by Dairy Queen s bait-and-switch are entitled to a gift card for at least five free Blizzards per person. 2. Dairy Queen is a billion-dollar subsidiary corporation of Warren Buffett s Berkshire Hathaway Inc. Dairy Queen understands that the fast-food industry involves tight profit margins and high sales volumes. Dairy Queen understands that it s profitable to generate traffic to its locations based on the promise of a free Blizzard, regardless of whether its locations intend to honor its promise. Dairy Queen understands that the law does not permit it to bait-and-switch its customers but continues to do so anyway, even after receiving hundreds of customer complaints through its mobile app. 3. Customers who fell prey to Dairy Queen s bait-and-switch can sign up to join the class action at DairyQueenCustomers.com. CLASS ACTION COMPLAINT Page 2 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 3 of 20 4. JURISDICTION AND THE PARTIES This Court has jurisdiction under 28 U.S.C. 1332 because the compensation and penalties sought in this case exceed $5 million, and because Ms. Spencer is a citizen of Oregon and Dairy Queen is a citizen of Delaware. 5. Defendant International Dairy Queen, Inc. (Dairy Queen) is a Delaware corporation and a person as defined at ORS 646.605(4) that regularly advertises delicious Blizzard ice cream treats to customers through its mobile app. 6. Plaintiff Mariel Spencer (Ms. Spencer) is an Oregon citizen and a Dairy Queen mobile app user and a person as defined at ORS 646.605(4) who bought a Blizzard at her local Dairy Queen location for personal consumption in June 2018 in response to Dairy Queen s mobile app advertisement. 7. Venue is proper under 28 U.S.C. 1391 because Dairy Queen advertised a free Blizzard to Ms. Spencer on its mobile app while she was a resident of the Portland, Oregon area. CLASS ACTION COMPLAINT Page 3 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 4 of 20 8. FACTUAL ALLEGATIONS In 2018, Dairy Queen advertised a mobile app to its customers, in an effort to increase profits and generate traffic to its various locations. Dairy Queen s mobile app advertised that if customers traveled to certain participating Dairy Queen locations, they could purchase a Blizzard at no cost. CLASS ACTION COMPLAINT Page 4 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 5 of 20 9. In or around June 2018, Dairy Queen advertised to Ms. Spencer on its mobile app that she could visit her local Dairy Queen location in Banks, Oregon and purchase a Blizzard at no cost. CLASS ACTION COMPLAINT Page 5 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 6 of 20 10. In response to Dairy Queen s advertisement of a free Blizzard, Ms. Spencer traveled to the Dairy Queen location in Banks, Oregon. She showed her mobile app screen to the cashier as Dairy Queen instructed and she followed all other terms and conditions necessary to receive her free Blizzard. However, after ordering, her local Dairy Queen location refused to provide her a Blizzard free of cost. Dairy Queen s false advertisement on its mobile app caused Ms. Spencer the loss of the money charged to her for a full-price Blizzard. 11. Investigation into Dairy Queen s practices revealed that Ms. Spencer was not alone. Hundreds of other customers have left comments complaining of Dairy Queen s false free Blizzard advertisement. https://play.google.com/store/apps/details?id=com.olo.dairyqueen.produ ction&hl=en_us&showallreviews=true CLASS ACTION COMPLAINT Page 6 of 20
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Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 9 of 20 12. As explained below, Dairy Queen s false advertisement of a free Blizzard on its mobile app violated Oregon s Unlawful Trade Practices Act in several ways. CLASS ACTION COMPLAINT Page 9 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 10 of 20 13. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(b)) by causing the likelihood of confusion and misunderstanding as to the source of its mobile app as a payment method for a Blizzard at no cost, and as to the approval for use of its mobile app at Oregon Dairy Queen locations, and as to the locations sponsorship and approval of its mobile app. 14. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(c)) by causing the likelihood of confusion and misunderstanding as to Dairy Queen s affiliation and association with Oregon Dairy Queen locations, and the locations certification of its mobile app as a valid payment source for a free Blizzard. 15. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(e)) by representing that it had approval from Oregon Dairy Queen locations that free Blizzards would be provided using its mobile app when in fact many Oregon Dairy Queen locations had not approved of the mobile app advertisement. CLASS ACTION COMPLAINT Page 10 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 11 of 20 16. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(i)) by advertising Blizzards as having no cost, with the intent that Blizzards would not be provided at no cost. 17. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(j)) by falsely representing the existence of a price reduction of Blizzards through use of its mobile app at Oregon Dairy Queen locations. 18. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(p)) by making false and misleading statements in its mobile app about its promotion used to publicize its Blizzards. 19. Dairy Queen violated Oregon s Unlawful Trade Practices Act (ORS 646.608(1)(s)) by making false and misleading representations about the cost customers would pay for Blizzards using its mobile app. CLASS ACTION COMPLAINT Page 11 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 12 of 20 20. Dairy Queen s violations of Oregon s Unlawful Trade Practices Act above were willful and reckless because even after receiving hundreds of complaints, Dairy Queen continued to falsely advertise that Oregon customers could purchase Blizzards for no cost using its mobile app. As a result of Dairy Queen s violations of Oregon s Unlawful Trade Practices Act as alleged above, Ms. Spencer and hundreds of other Oregon customers suffered ascertainable losses of the money they paid to purchase a delicious Blizzard ice cream treat that should have been free, and of the transportation costs and other resources each of them expended to travel to a Dairy Queen location that they otherwise would not have expended had Dairy Queen not lured them in with the false promise of a free Blizzard. CLASS ACTION COMPLAINT Page 12 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 13 of 20 21. CLASS ACTION ALLEGATIONS Under FRCP 23, Ms. Spencer brings this action on behalf of herself and all other similarly situated Oregon Dairy Queen customers. The class is initially defined as: a) Oregon Dairy Queen customers who, b) after January 1, 2018, downloaded Dairy Queen s mobile app, and c) solely in response to an advertisement by Dairy Queen on its mobile app of a free Blizzard, d) traveled to a Dairy Queen location provided by the mobile app and e) otherwise followed all other terms and conditions necessary to receive a free Blizzard, and f) suffered ascertainable losses of the money paid to purchase a Blizzard that should have been free, or of the transportation costs and other resources expended to travel to a Dairy Queen location they otherwise would not have expended had Dairy Queen not lured them in with the false promise of a free Blizzard. CLASS ACTION COMPLAINT Page 13 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 14 of 20 22. A class action is proper under FRCP 23(a) because based on the number of Dairy Queen locations in Oregon and the number of complaints received on Dairy Queen s mobile app, the class consists of hundreds of individual Oregon customers, and joinder of all members is impracticable. Each class member is identifiable based on Dairy Queen s mobile app records, Dairy Queen s receipts, Dairy Queen s credit card transactions, and based on independently submitted claim forms. Excluded from the class are all attorneys for the class, executives of Dairy Queen, any judge who sits on the case, and all jurors and alternate jurors who sit on the case. 23. This action can be maintained as a class action under FRCP 23(a) and (b) because there are questions of law and fact common to the class members, which predominate over any questions relating to individual class members, including but not limited to: a) Whether Dairy Queen caused the likelihood of confusion and misunderstanding as to the source of its mobile app as a payment method for a Blizzard at no cost, and as to the approval for use of its app by Oregon Dairy Queen locations, b) Whether Dairy Queen caused the likelihood of confusion and misunderstanding as to its affiliation and association with CLASS ACTION COMPLAINT Page 14 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 15 of 20 Oregon Dairy Queen locations and the locations certification of its mobile app as a valid payment source for a free Blizzard, c) Whether Dairy Queen falsely represented that it had approval from Oregon Dairy Queen locations that free Blizzards would be provided using its mobile app, d) Whether Dairy Queen advertised Blizzards as having no cost, with the intent that Blizzards would not be provided at no cost, e) Whether Dairy Queen falsely represented the existence of a price reduction of Blizzards through use of its mobile app at Oregon Dairy Queen locations, f) Whether Dairy Queen made false and misleading statements in its mobile app about its promotion used to publicize Blizzards, g) Whether Dairy Queen made false and misleading representations about the cost customers would pay for Blizzards using its mobile app, h) Whether Dairy Queen behaved willfully, recklessly or maliciously, whether Dairy Queen s behavior as alleged in this complaint violated Oregon s Unlawful Trade Practices Act, and whether under Oregon law, Dairy Queen should be able to retain the money wrongfully charged to customers for Blizzards that were advertised for free. CLASS ACTION COMPLAINT Page 15 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 16 of 20 24. Ms. Spencer s claims are typical of the claims of the class members, as they are based on the same factual circumstances, common representations, common omissions, and legal theories. Ms. Spencer has no interests adverse to the class members. Ms. Spencer will fairly and adequately represent and protect the interests of the members of the class. Ms. Spencer has retained nationally known and locally respected counsel experienced in class action litigation to further ensure such representation and protection of the class. Ms. Spencer and her counsel intend to prosecute this action vigorously and have the resources necessary to successfully try this case to judgment. 25. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. Absent class-wide adjudication, members of the class are without effective recourse. Few, if any, class members can afford to prosecute individual actions against Dairy Queen, especially in light of the Blizzard cost at issue. Absent class treatment, Dairy Queen s alleged wrongdoing would go unabated, and no class member would be afforded the opportunity to seek judicial relief, whether for themselves or for the public good generally. CLASS ACTION COMPLAINT Page 16 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 17 of 20 26. The nature of the fairly low cost of the product at issue (a delicious Blizzard ice cream treat) means that very few, if any class members will choose to litigate a claim on an individual basis. This case is only economically viable as a class action. A class action is appropriate under FRCP 23(b)(3) because the questions of law and fact regarding the nature and legality of Dairy Queen s behavior as alleged in this complaint predominate over any questions affecting only individual class members, and a class action is superior to other available methods for the fair and efficient adjudication of this controversy, for the following reasons: a) The prosecution of separate actions creates a risk of inconsistent or varying rulings, b) The common questions of law and fact described above predominate over questions affecting only individual members, c) Individual class members would have little interest in controlling the prosecution of separate actions due to the nature of the delicious Blizzard ice cream treat at issue and because of the expenses of litigation, and d) A class action will be an efficient method of adjudicating the claims of the class members. CLASS ACTION COMPLAINT Page 17 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 18 of 20 27. CLAIMS FOR RELIEF Claim 1 for Violation of the UTPA Dairy Queen s behavior as alleged in this complaint willfully and recklessly violated Oregon s Unlawful Trade Practices Act, including ORS 646.608(1)(b),(c),(e) (i), (j), (p), and (s). Dairy Queen s behavior was reckless, in pursuit of profit, and constituted a wanton, outrageous and oppressive violation of the rights of Ms. Spencer and the putative class members to be free from unlawful trade practices. As a result of Dairy Queen s violation of Oregon s Unlawful Trade Practices Act as alleged above, Ms. Spencer and all other similarly situated individual customers are entitled to statutory damages, punitive damages, and reimbursed litigation expenses, fees and costs under ORS 646.638. 28. Claim 2 for Unjust Enrichment As a matter of justice and equity, Dairy Queen should not be able to retain the profits it gained from Ms. Spencer and the putative class under these circumstances. Ms. Spencer and the putative class are entitled to restitution based on Dairy Queen s unjust enrichment as alleged in this complaint. 29. Demand for jury trial. CLASS ACTION COMPLAINT Page 18 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 19 of 20 30. PRAYER FOR RELIEF Ms. Spencer seeks relief as follows: A. An order that Dairy Queen violated Oregon s Unlawful Trade Practices Act, B. A judgment against Dairy Queen for the monetary value of at least five Blizzards per class member, C. Reimbursement of litigation expenses, fees and costs, and D. For any other relief this Court may determine is fair and proper. July 13, 2018 RESPECTFULLY FILED, s/ Michael Fuller Michael Fuller, OSB No. 09357 Lead Trial Attorney for Ms. Spencer OlsenDaines US Bancorp Tower 111 SW 5th Ave., Suite 3150 Portland, Oregon 97204 michael@underdoglawyer.com Direct 503-743-7000 CLASS ACTION COMPLAINT Page 19 of 20
Case 3:18-cv-01252-SB Document 1 Filed 07/13/18 Page 20 of 20 PROOF OF MAILING I declare and certify that on the date below I caused a copy of this complaint to be mailed to the following: Ellen Rosenblum Oregon Attorney General Oregon Department of Justice 1162 Court Street NE Salem, Oregon 97301-4096 July 13, 2018 s/ Michael Fuller Michael Fuller, OSB No. 09357 Lead Trial Attorney for Ms. Spencer OlsenDaines US Bancorp Tower 111 SW 5th Ave., Suite 3150 Portland, Oregon 97204 michael@underdoglawyer.com Direct 503-743-7000 CLASS ACTION COMPLAINT Page 20 of 20